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Sensex got close to 30,000 last year. Now, it is around the same level. So, can it be said that it is undervalued?

Dhirendra Kumar says why such an assumption can't be made and why it shouldn't matter much to an investor

Transcript: I don't think it can be determined like that. The underlying components of the assets within Sensex have undergone many changes. Some of the companies have performed exceedingly well, like SBI, which has generated good returns in the last 1 year; or Reliance which has struggled for 10 years and now is up by 35-40%. On the other hand, some companies have had poor performance. So, there is a mixed bag of good, average and bad performance, which is why Sensex averages out. A good part of the Sensex was cheap and still is. It is a relative change. You, as an investor, should stick to your investment plan and continue with your regular investment irrespective of the market conditions.

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